Autodesk case tests whether software can be resold

Sep 24, 2007

Tim Vernor, a full-time eBay trader, is suing Autodesk, Inc. (www.autodesk.com) over his right to resell software he legally bought. The legal question raised by this lawsuit is how far a license can control a customer’s use of software.

Vernor bought copies of Autodesk’s AutoCAD software at local garage sales and then resold them through eBay auctions. Autodesk sent several claims of copyright infringement to the online auction service, which suspended Vernor’s trading account.

Autodesk claims that Vernor’s sale of second-hand copies of the software violated the terms of the software license, and that Vernor’s sale of copies on eBay constituted copyright infringement. Vernor says that Autodesk used the Digital Millennium Copyright Act to have his sales removed from eBay’s site on five separate occasions.

Vernor filed a lawsuit for $10 million in punitive damages plus $7,000 in lost sales. His suit claims that Autodesk did not take the right action when it sent notices to eBay. He also claims he has the right to trade the software under the principle of ‘first sale’, which in U.S. law says that a legitimate buyer of software can resell it with or without the copyright holder’s permission.